Never too much to learn about trademarks, branding, and the law.

Google’s new Alphabet: bad writing on BMW’s wall?

Google’s entire company was restructured under a parent company called Alphabet. I really like the name, which I interpret as a clever suggestion that the parent company holds all the individual pieces which make up the entire set of technology for the company. Larry Page himself said he liked the name because “it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search.” I picked up this story because I love technology and branding law, and because of the latter I did a quick trademark “clearance” search, much like I would do for a client. That search left me very curious as to the strategy behind the trademark team at Google, which I can only assume investigated the use of ALPHABET as their new brand (albeit it, just a holding company and not a consumer brand with consumer products).

Google’s legal restructuring a few days ago resulted in a holding company called Alphabet and splitting up Google into multiple independent subsidiaries which all fall under Alphabet. This was a huge move by the company to make it “cleaner and more accountable” and to allow subsidiaries to “prosper through strong leaders and independence”, as Mr. Page put it. In effect the services engaged in by Alphabet as a holding company would be business management and financial affairs services, services which fall under Classes 35 and 36 of the Nice Classification.

I’ve explained all this as a foundation to the fact that that German car company in some people may know about, BMW, owns the trademark for ALPHABET in Classes 35 and 36 in many jurisdictions. In my brief search, I found 18 trademark registrations for ALPHABET in Class 35 and/or 36 with coverage in at least 30 jurisdictions. When we expand that to include trademark registrations for ALPHABET in related goods/services that number moves to at least 46 jurisdictions.

In short, BMW has a strong interest in the ALPHABET name vis-à-vis Google’s ALPHABET, the latter of which clearly encroaches on BMW’s legal protection of ALPHABET. Under normal circumstances, a brand in BMW’s position would be advised to take legal action to fend off encroachments onto one’s brand. This might actually be the case for a hedge fund in New York called Alphabet Funds, whose founder has received phone calls from investors and friends saying things like “Google took your name.” Because Google’s Alphabet will engage in venture capital funding and asset management, it is not unlikely that there may be some competition between Google’s Alphabet and Alphabet Funds, which would be more than enough to trigger liability for Google from a trademark perspective.

My main curiosity is: what will BMW do and what have Google’s lawyers already done to address that? My first guess was that Google had a confidential agreement with BMW regarding the accepted usage of their respective brands, although that was dispelled during the writing of this blog by news reports that BMW’s spokesperson said they are looking into any trademark problems, but that there are no plans for litigation yet.

One could argue there is little risk of actual loss of business or profits if the brands continue acting as they are: BMW’s Alphabet is focused on the auto industry and all their services (finance, leasing, data collection, etc.) serve to corporate enterprises with vehicle fleets and Google’s Alphabet will merely contain self-branded projects within its basket. Even though the holding bin will contain auto-related brands, such as the Google Self-Driving Car Project, as far as these two ALPHABET brands go, they don’t exactly intersect. Additionally, any potential clients of either ALPHABET would be considered a sophisticated purchaser, which means that the threshold for a consumer to be likely to be confused (the trademark infringement standard) would be much higher than, for example, consumers of competing soft drink brands (those consumers buy products with much less thought and research than sophisticated financial/business services). This is a consideration against BMW. On the other hand, flooding a similar market with another ALPHABET brand, to the point where BMW’s www.alphabet.com website has seemingly crashed and remained down for days since the Google announcement definitely has some cognizable negative effect for BMW.

Alphabet may be a great name in and of itself, but trademark law favors the earlier user of a trademark when there is a later, similar mark used. In this case, “ALPHABET” is the brand name of an important part of BMW’s business, and even though the chance that someone would be confused between BMW and Google’s Alphabet, allowing Google to keep its Alphabet would necessarily mean a weakening of BMW’s Alphabet brand in a legal sense.